oilseed – Agri Limpopo

South African Agricultural Commodities Weekly Wrap – 28 July 2017.

Arithmus — Fri, 28 Jul 2017 08:18:50 +0000

This was a data parked week for grain and oilseed markets with releases that include production estimates update, producer deliveries, weekly trade figures and monthly stocks data, amongst others.

The most anticipated of all was the National Crop Estimate Committee’s sixth production estimate which showed a 2% m/m upward revision in maize production estimate to an all-time high of 15.97 million tonnes. Other commodities were left unchanged from the previous month.

In terms of market performance, all grain and oilseed commodities were under pressure with the exception of sunflower seed. For fruits and vegetables, the week has been fairly volatile, driven by changes in volumes traded.

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South African Agricultural Commodities Weekly Wrap

Arithmus — Mon, 27 Aug 2018 08:38:50 +0000

This week there were no major data releases in the South African grain and oilseed market. The weaker domestic currency against the US Dollar, coupled with higher Chicago grain prices provided support to the grain and oilseed market.
The notable gains were on white and yellow maize, as well as soybean spot prices, with each respectively up by 3 percent from last week. Sunflower seed and wheat prices were up by 2 percent and a percentage point from last week’s average prices.
Next week, the national Crop Estimate Committee will release an update of the 2017/18 summer grain and oilseed production forecasts, as well as the first 2018/19 winter wheat production forecast. There is generally some optimism in the market that this season’s wheat production could recover due to expansion in area planted and favourable weather conditions in some parts of the Western Cape and inland regions.
Aside from the grain and oilseed market, the SAFEX beef carcass market experienced a quiet week with prices unchanged from levels seen last week. In terms of the beef supply, the South African farmers slaughtered 190 454 head of cattle in June 2018, down by 14 percent from the corresponding period last year.

Sourced: Weekly wrap, Agribusiness Research

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Good Rain, Good Start of the Planting Season

Arithmus — Mon, 29 Oct 2018 08:31:19 +0000

South Africa’s summer crops could have a good start of the season as the weather forecasts for the next two weeks show prospects of rainfall over most parts of the country. Admittedly, while this is a welcome development, it also means that planting activity in some areas could be slightly delayed. But this is not much of an issue as the planting window for most crops will remain open until December 2018, particularly white maize and sunflower seed in the western parts of South Africa.
So, while numerous factors such as the ZAR/USD exchange and the Chicago grain and oilseed price movements could influence the SAFEX grain and oilseed prices, we believe that the weather will be an important driver of prices within the next four months or so, specifically the new season contracts.
In today’s morning note, we explore the potential impact of the weather outlook per crop, but also comment on the recent data releases, with a key focus on SAGIS month figures. The SAGIS monthly data is important for a number of reasons, with the key one being the fact that it presents the monthly consumption figures and also current stock or inventories.

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Sourced: Agbiz, Agribusiness Research

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Will the Tight Global Grain and Oilseed Supplies have a Notable Impact on SA?

Arithmus — Tue, 30 Oct 2018 07:43:29 +0000

Although the 2018/19 maize and soybean production is expected to be up from the previous season, the stocks will be tight due to a decline in wheat production, as well as a general uptick in consumption. Broadly speaking, this means that global grain prices could move sideways to upwards in the near to medium term.
To dive into the details of the aforementioned summary, the global maize supplies will remain tight despite the expected 3 percent year-on-year improvement in 2018/19 global maize production to 1.07 billion tonnes. This is largely due to the increasing demand from both the animal feed processors and industrial use (ethanol). In the case of animal feed, this could be linked to the expected decline in global wheat production, which has led to an uptick in prices, hence some processors opt for maize as a substitute.
Overall, this will have minimal implication on the South African maize market as it is well supplied. But the same cannot be said about wheat, as South Africa is a net importer and thereafter exposed to global shocks.
In this mornings’ note, we explore the global picture of maize, wheat, soybeans and sunflower seed.

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Sourced: Agbiz, Agribusiness Research

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The Weather will remain a Key Driver of SA Grains and Oilseed Market until February 2019

Arithmus — Wed, 31 Oct 2018 09:25:50 +0000

Between October and February, which is typically planting to pollination, the weather becomes an important factor in the South African grains and oilseeds market and, to some extent, a major driver of prices. While there are concerns about a possible El Niño later in summer, the season started on sound footing with widespread rainfall in the eastern and central parts of the country. Moreover, farmers have also shown some optimism as the summer grains and oilseed area plantings are set to increase by 5 percent year-on-year to 4.03 million tonnes in the 2018/19 production season.
So far, the planting activity has been fairly good in the eastern parts of the country. These good conditions could gain momentum over the coming weeks, not only because the optimal planting window will narrow around mid-month, but also due to a largely favourable weather outlook.
The weather charts this morning currently show prospects of between 20 and 90 millimetres of rainfall over the summer crop growing provinces within the next two weeks. Admittedly, higher rainfall could potentially slow the planting activity in some areas, but potential improvement in soil moisture will have far enriching benefits to the crops later in the season. Possible planting delays will not be much of an issue as some areas could still plant outside of the optimal period, although yield levels could be slightly affected.
The impact of the favourable near-term weather prospects on prices has been muted. For example, yellow maize is up by over 15% y/y at R2 401 per tonne on 30 October 2018. At the same time, white maize price up by roughly 21% y/y at R2 411 per tonne. This looks as if the market is somewhat pricing in the potential decline in production on the grounds of a possible El Niño.
Be that as it may, other institutions such as the International Grains Council are fairly optimistic about South Africa’s 2018/19 maize production at 12.3 million tonnes, down 9% year-on-year (commercial and non-commercial maize) from anticipated lower yields on the back of the forecast El Niño weather phenomenon later in the summer.
To be clear, with a harvest of 12.3 million tonnes, South Africa would remain a net exporter of maize until April 2020. By and large, as a country, we consume about 10.8 million tonnes of maize a year and we will probably have about 3.3 million tonnes of stocks when the 2019/20 marketing year starts in May 2019.
If we add the expected production of 12.3 million tonnes to the potential 3.3 million tonnes of stocks, South Africa’s maize supplies will be in good shape over the next two years, all else being equal.
Aside from maize, the planting activity is underway in other summer crops such as soybean and the farmers are expected to plant a record level of 851 800 hectares. Similar to other crops, the weather will be a key determinant of the overall production. Worth noting, however, the soybean pollination stage could fall in within the rainy period (before El Nino), especially the areas that planted early, which increases a chance of higher yields.

Winter Crops

The weather outlook over the winter crop growing areas of the Western Cape province shows clear skies for the next two weeks, which is a good window for the harvest process that is currently underway. As set out in our previous notes, South Africa’s winter wheat production is estimated at 1.86 million tonnes, well above the previous season’s area of 1.54 million tonnes. The improvement is on the back of higher yields and an expansion in overall area planted.
But some areas of Swartland were hard hit by heavy winds and rainfall in the past few days, which negatively affected the quality and the volume of the crop. Hence, we believe that the Crop Estimate Committee will release its production estimate down next month form the current estimate of 1.86 million tonnes. In terms of prices, the South African wheat prices are up marginally from last year, with the spot price closing at R4 422 per tonnes on 30 October 2018.
We are on the road today, we will be back with the usual Agbiz Morning Market Viewpoint tomorrow, 01 November 2018.

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Sourced, Agbiz, Agribusiness Research

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Factors currently underpinning SA grain and oilseed market

Arithmus — Thu, 15 Nov 2018 07:26:00 +0000

After experiencing a good run at the beginning of the week, yesterday almost all SAFEX grain and oilseed contract month prices pulled back and settled in negative territory. This was underpinned by a broad range of factors, but the most notable ones were the recovery in the domestic currency, as well as prospects of higher rainfall within the next two weeks. This morning the near term weather forecasts suggest that most parts of the country (with the exception of the Northern Cape and northern parts of Limpopo) could receive as much as 20 to 80 millimetres of rainfall. This is good for both areas that are yet to plant as it will improve soil moisture ahead of the process, and also bode well for recently planted areas as it will support the germination process of the crop.
The weather and ZAR/USD exchange are fundamental factors that will continue to underpin the domestic grain and oilseed market for months to come. In the case of the weather, however, the critical months are October to February, which is typically planting to pollination.
As set out in our previous notes, there is general optimism in the farming community regarding the 2018/19 summer grain and oilseed production. This is evident from the recent tractor sales data, and also farmers’ intentions to plant data. The data showed that summer grain and oilseed area plantings could increase by 5 percent year-on-year to 4.03 million tonnes in the 2018/19 production season. Most summer crops are expected to increase, with the exception of sunflower seed and groundnuts. While these farmer’s intentions are promising they are just that: farmers’ intentions. The actual summer crop planting estimates will be released on 29 January 2019.
The key risk on the path ahead, which we have emphasised in our previous notes, is the possibility of a weak El Niño. The South African Weather Service has indicated that this weather phenomenon could lead to drier weather condition in a period between the end of January and March 2019. This is a crucial period for most grain and oilseed because it coincides with pollination, which requires moisture. The global agricultural agencies such as the International Grains Council and the United States Department of Agriculture, amongst others, painted a somewhat positive picture of South Africa’s 2018/19 summer grain and oilseed production outlook, albeit the estimates lower than the previous production year. For example, maize production estimates currently range between 12.3 and 13.0 million tonnes, which is well above the long-term average of 12.0 million tonnes. Going forward, however, the weather will be a key determinant of whether any of the aforementioned data points materialise and this will be a central theme in the market for the next three months.

Winter Crops

Winter wheat harvest process is in full swing in the Western Cape. In the first six weeks of the 2018/19 marketing year, the producer deliveries amounted to 449 888 tonnes, which equates to 50 percent of the Western Cape’s expected harvest for the current season. While the upcoming deliveries figure for 16 November 2018 could show a further uptick form volumes delivered the previous weeks, the weeks of November 23 and 30 shows prospects of rainfall over the Western Cape, which could slow the process and might also negatively affect the quality of the crop in areas that have not yet harvested. Above all, South Africa’s wheat production is estimated at 1.86 million tonnes, up by 21 percent year-on-year. The improvement is on the back of higher yields and an expansion in overall area planted.
We are on the road again today, we will be back with the usual Agbiz Morning Market Viewpoint tomorrow, 16 November 2018.

Click HERE for the full report.

Sourced: Agbiz, Agribusiness Research

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SA tractor sales reach highest level since October 2014

Arithmus — Thu, 15 Nov 2018 14:15:38 +0000

October is traditionally a good month for South African tractor sales as summer grain and oilseed farmers are typically preparing for the planting process. This year did not disappoint, the sales reached 817 units, which is highest levels since October 2014. South Africa’s tractor sales for the first 10 months of this year amounted to 582 units, which is 10% higher than the corresponding period last year. The combine harvester sales also rebounded to 29 units in October 2018, which is double the previous month’s sales. This was mainly underpinned by the ongoing winter crop harvest process.

October 2018 tractor sales of 817 units (+16% y/y) far exceeded our expectations of 721 units, which would have been a 2% y/y increase (figure 1). Aside from the fact that October is at the start of the summer crop planting period with generally higher demand from farmers as they prepare for the new season, the fairly large machinery stock in the market might have also contributed to the increase in sales. Moreover, the tractor sales data support the recent farmer’s planting intentions’ figures, which showed that South African farmers intend to increase the area planting for summer grain and oilseed by 5% from 2017/18 season to 4.03 million hectares.
The combine harvester sales more than doubled the previous month’s volume and 45% higher than October 2017, with about 29 units sold. This was driven by the winter crop harvest process which is currently underway in barley, wheat and canola producing regions of the Western Cape. The combine harvester sales will most likely remain solid in the coming month as the winter crop harvest process is yet to start in other provinces.
Overall, we are generally optimistic about the South African agricultural machinery sales performance in the near-to-medium term. But tractor sales could slow in the coming months as a large share of the purchases have already been made and planting activity will be completed by end of the year in most regions.

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Sourced: Agbiz, Agribusiness Research

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South African Agricultural Commodities Weekly Wrap

Arithmus — Fri, 16 Nov 2018 08:48:31 +0000

In the absence of major data releases, the weather was again a primary focus in the South African grain and oilseed market this week. This time around, however, the prospects have turned positive for summer crop areas, with expectations of higher rainfall in the country within the next two weeks. This is good for both areas that are yet to plant as it will improve soil moisture ahead of the process, and also bode well for recently planted areas as it will support the germination process of the crop.
The eastern part of South Africa, which predominantly produce yellow maize and soybeans, have made good progress in terms of planting, whereas the western regions have not started in large areas due to drier conditions in the past few weeks.
In terms of winter crops, the past couple of weeks brought cool and drier weather conditions in the Western Cape, and that supported the harvest process.
Aside from the grain market, the SAFEX beef carcass market experienced a quiet week with prices unchanged from levels seen last week. In terms of the supply, the South African farmers slaughtered 189 108 head of cattle in September 2018, down by 11 percent year-on-year due to the herd rebuilding process after a reduction during the 2015-16 drought.
In the first nine months of this year, the South African farmers slaughtered roughly 1.8 million head of cattle, down by 7 percent from the corresponding period last year.

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Sourced: Agbiz, Agribusiness Research

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Good weather, good planting pace

Arithmus — Mon, 19 Nov 2018 09:45:23 +0000

The key highlight this morning is the prospect for good rainfall of roughly 20 to 90 millimetres over most summer crop growing areas of South Africa within the next two weeks. This will help ease the heat stress that was starting to build up in the past few days in the areas that have already planted, specifically Mpumalanga, parts of Gauteng and Free State. Most importantly, the yellow maize planting window is narrowing in the eastern parts of South Africa, which could be closing this week, and therefore improvement in moisture will enable farmers to complete the planting process. In terms of soybeans, the areas that have not yet completed the planting process still have time until the end of the year.
The areas in the western parts of South Africa, which predominantly produce white maize and sunflower seed, have not received any notable rainfall since the start of the season. And therefore, planting activity has not commenced. This, however, is not a significant concern as the optimal planting window will be open until December in the case of white maize, and beginning January 2019 in the case of sunflower seed. Therefore, the expected rainfall within the next two weeks is exactly what is needed to stimulate the planting process.
From an area planting perspective, there is still some optimism in the market that the 2018/19 summer crop plantings could reach 4.03 million hectares, up by 5 percent from the previous season. An update of this figure will be released at the end of January 2019. In the coming weeks, we will closely monitor the planting activity.
Aside from production conditions, most grains and oilseeds prices were under pressure on Friday, partly due to the relatively stronger rand against the US dollar. Today, the ZAR/USD exchange, weather conditions and Chicago grain and oilseed price movements will be amongst the key factors driving SAFEX grain and oilseed prices.
Also worth noting is that the dam levels have improved significantly in the Western Cape, thanks to the recent rainfall (see Figure 1 below).

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Sourced: Agbiz, Agribusiness Research

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The 2018/19 maize production prospects of South Africa’s neighbouring countries

Arithmus — Mon, 21 Jan 2019 09:18:01 +0000

Zimbabwe is likely to experience a shortage of maize supplies in the 2019/20 marketing year due to an expected poor harvest.

Zambia and Malawi’s maize harvest could fall double-digit from the 2017/18 production season, but the countries could still be self-sufficient in the 2019/20 marketing year (corresponds with 2018/19 production season), supported by fairly large stocks from the previous year.

Back in home soil, the western maize production areas of South Africa are now critically dry once again because of the hot and dry weather and relatively limited soil moisture leading into the week of 17 January 2019. The impact of this was reflected in maize prices which rallied to levels over R3 000 per tonne, particularly white maize which is planted in the western regions.

An important date to keep an eye on is 29 January 2019 when the national Crop Estimate Committee releases the preliminary planting data for South Africa’s summer grains and oilseeds.

The weather will continue to play a key role in the South African agricultural markets in the next three months. Thereafter, the focus will shift to winter crop producing areas. The near-term precipitation prospects are constructive (see page 6).

At the end of the week of 17 January 2019, SAFEX wheat prices were up by 17% from levels seen in the corresponding period last year, trading around R4 379 per tonne. This was driven by high international wheat prices and the relatively weaker domestic currency.

Overall, the tough production conditions in the grains and oilseeds subsectors will most likely add upward pressure on consumer prices, but we do not expect a notable uptick in headline food price inflation, as lower meat prices will somewhat overshadow the potential upswings.

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Sourced: Agbiz, Agribusiness Research

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